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  Jeff Bailey   5/6/2004,  5:37:47 PM
Per Jim's 16:34:51 ... a reward in gold? He might not get any takers. Link

 
 
  Jim Brown   5/6/2004,  4:34:51 PM
Dow Jones Alert - DJ is reporting that Bin Laden is offering a reward in gold to anyone that kills any of the new officials in Iraq as well as Paul Bremer and Kofi Anon.

 
 
  Jeff Bailey   5/6/2004,  4:19:21 PM
QQQ $35.26 -0.75% ... is stock market a bit confused? QQQ closes right where it closed on Tuesday, the day of FOMC Meeting. Might be a sign that market is really waiting to see what the nonfarm data is.

 
 
  Jeff Bailey   5/6/2004,  4:16:40 PM
OSI Pharma (OSIP) $77.20 +1.17% ... here's 60-minute interval chart with QChart's recent WEEKLY Pivot and DAILY Pivot analysis levels turned on. Link

OK... so they're still in beta test mode and we can't really make left/right adjustments to labels, or select just a few periods (days or weeks) of study, but this is a new product. We'll work through it in the meantime.

Still... I think this feature will be an added benefit to traders of stocks.

 
 
  Jim Brown   5/6/2004,  4:02:03 PM
Earnings After the Close - Reduced List:

UVN est = +0.08, actual = +0.09
ATVI est = +0.01, actual = +0.04
AETH est = -0.12, actual = -0.20
NVDA est = +0.10, actual = =0.12
PIXR est = +0.39, actual = +0.46
HLTH est = +0.09, actual = +0.09

 
 
  Jeff Bailey   5/6/2004,  3:58:48 PM
OSI Pharma (OSIP) $77.25 .... first test is for this bugger to at least hold a close above $76.55 and 38.2% retracement.

 
 
  Linda Piazza   5/6/2004,  3:55:28 PM
I mentioned in my last post that the OEX sometimes has difficulty pulling free of the gravitational pull of the mid-channel Keltner support, and that's what's happening now. Those in OEX-related plays should consider how lucky they feel when deciding whether to hold onto plays overnight, because it may take luck more than technical analysis to guess on the right side of a play. The OEX is poised just above a long-term ascending trendline, ready to fall through or ready to climb.

 
 
  Jeff Bailey   5/6/2004,  3:52:51 PM
Swing trade call option alert for OSI Pharma July $90 Calls (GHUGR) ... taking 2 contract for the MM swing trade at offer of $4.20.

Not stop for now, targeting $120 for at least one of them.

PnF chart of OSIP at this Link

 
 
  Jeff Bailey   5/6/2004,  3:49:14 PM
Those without QCharts .... Jeff: For those that do not have Q Charts you can find pivot points and other indicators listed on Barcharts.com by clicking on "projections".

Gene.

 
 
  Jeff Bailey   5/6/2004,  3:47:17 PM
OSI Pharma (OSIP) $77.50 +1.5% ... I'd like at least 1 call into the close.

May not be as INTEREST RATE sensitive either.

 
 
  Jeff Bailey   5/6/2004,  3:45:35 PM
Late gains ... SOX.X +0.35%, DRG.X +0.1%, UTY.X +0.22%

 
 
  Jeff Bailey   5/6/2004,  3:37:33 PM
Buy program premium

 
 
  Linda Piazza   5/6/2004,  3:32:56 PM
The OEX just popped above mid-channel Keltner support, reaching it a little sooner than the 3:40 time I expected. The midpoint of the plunge was at about 544.50 and the upside target of the reverse H&S was about there, too, so the OEX is moving above both. Be careful, however, as it's sometimes difficult to tug free of the gravitational pull of that mid-channel resistance.

 
 
  Jeff Bailey   5/6/2004,  3:24:23 PM
10-year YIELD ($TNX.X) Here's 30-minute chart, which give some YIELD perspective in recent weeks. I'm also making some comments as if thinking out loud. Trying to study the bond market's reaction to recent facts (FOMC decision), then tie in with last night's Index Wrap thoughts. Link

The QChart's WEEKLY Pivot retracement gives me some price levels, if traded, where I can then begin to test my thoughts/scenario.

 
 
  Jeff Bailey   5/6/2004,  3:09:10 PM
Good comment from Bob Pisani on CNBC. Those are pretty much my thoughts right now. Note that he said "acceleration of the move" if any, from the bond market.

I say "good comment" only because that would appear to be what the market is actually trading on.

 
 
  Jim Brown   5/6/2004,  3:08:52 PM
Volume is very low today. We just crossed 3B shares across all markets. Declining volume still 5:1 over advancing despite the low volume.

 
 
  Linda Piazza   5/6/2004,  3:04:57 PM
Now it's time for those who might have considered bullish OEX plays to be careful, or even more careful. That rise is now narrowing, taking on the aspect of a rising wedge, and those are generally considered bearish formations.

 
 
  Jeff Bailey   5/6/2004,  3:03:41 PM
Semiconductor HOLDRS (SMH) $35.83 -0.19% .... here's a 30-minute interval chart of SMH, with some volume studies turned on. Also turned on the QCharts WEEKLY Pivots, where I'm testing my thought process as to potential trade. Link

Bulls are most likely playing bullish above $35.22, and looking for a break above WEEKLY Pivot to lend strength to WEEKLY R1 $37.80, but with overhead supply around that level, would most likely trade out, then look for short.

Bears are holding, but looking for WEEKLY Pivot ($36.51) and last week's S2 ($36.28) to keep things in check. A break much below the $34.12 has WEEKLY S1, WEEKLY S2 in play, should volume at price cave in.

Question: Where do you think SMH closes out today? I'm thinking right around in here somewhere (current levels of trade).

What do you think the market response will be to the nonfarm payroll number? Do you know what the nonfarm payroll number is? I don't.

However, I'm looking around for some trade ideas, and this one is on my list for tomorrow. If SMH gaps open lower, I'm ready. If SMH gaps higher tomorrow, I'm ready.

 
 
  Jim Brown   5/6/2004,  2:53:51 PM
Earnings After the Close - Reduced List:

UVN est = +0.08, actual =
ATVI est = +0.01, actual =
AETH est = -0.12, actual =
NVDA est = +0.10, actual =
PIXR est = +0.39, actual =
HLTH est = +0.09, actual =

 
 
  Jim Brown   5/6/2004,  2:49:56 PM
Jobs Report
I am getting buried with questions about the Jobs report tomorrow and my take on jobs and rates. (like we need another public opinion?) But here goes in answer of those emails.

I was expecting something tame in the 100K range until the last couple days. With the Challenger and Monster surveys both showing an explosion in employment and labor components in Fed surveys rising I am starting to rethink my assumption. I am thinking we could see a stronger than expected number BUT not a blowout. I personally think the Fed had advance knowledge on Tuesday when they elected to pass on a rate hike. Remember, I posed that outlook a couple weeks ago that no hike from the Fed would mean a tame jobs report. We will see tomorrow if that was true.

If they did not have an advance peek then we could have some fireworks tomorrow and Monday. I think any number under 200K will be met with buying and no rate change until June. The Fed will get another free look at the May payrolls and the June payrolls by that meeting.

If the numbers are over 200K we could see some more selling but I do not expect any immediate rate hike unless they are over 300K then Monday could see some Fed action.

Remember, we could see a downward revision to last months blowout that could remove any pressure to act. Say a revision to 225K and a 200K number for this month would put the Fed on hold until August.

It is always tough if not impossible to predict jobs. We have seen hundreds of analysts fail at it over the last several months in public appearances. It is best to just wait for the report and then pick a direction.

 
 
  Linda Piazza   5/6/2004,  2:47:00 PM
The rising pattern off the OEX low still has the tight back-and-forth motion that's indicative of a bear flag, but a retracement above the midpoint of the flagpole drop at about 544.50 (also the upside target of the reverse H&S and near the mid-channel Keltner resistance) would suggest that it's something more. As I've been suggesting since the OEX hit lower Keltner support, bears should have an exit plan already in mind.

 
 
  Jane Fox   5/6/2004,  2:43:41 PM
Dateline CNN President Bush says he is sorry for the humiliation suffered by Iraqi prisoners at the hands of U.S. troops.

 
 
  Jeff Bailey   5/6/2004,  2:39:38 PM
Semiconductor Index (SOX.X) intra-day chart with WEEKLY/MONTHLY retracemenet at this Link

Hanging kind of tough if you ask me.

 
 
  Jeff Bailey   5/6/2004,  2:29:35 PM
S&P Banks Index (BIX.X) with WEEKLY/MONTHLY retracement at this Link

One sign, in my opinion, of how market may really be trading purely off of psychology, more than reasoning or fact.

It's similar to some stocks like TASR, where at times, there was NO EXPLANATION as to the "why," but trade/price was driven by PSYCHOLOGY. Trading PSYCHOLOGY or SENTIMENT is the toughest trade around, as it is the most difficult to analyze.

 
 
  Jane Fox   5/6/2004,  2:28:56 PM
I am getting inundated with them Linda.

 
 
  Jonathan Levinson   5/6/2004,  2:28:45 PM
The mania appears fully in gear, Linda.

 
 
  Linda Piazza   5/6/2004,  2:28:05 PM
Is anyone else noticing an explosion of emails about great stock deals lately? Is that some kind of barometer to indicate when the retail investor is getting more (too?) interested and likely more drawn into scams?

 
 
  Linda Piazza   5/6/2004,  2:21:32 PM
The OEX has broken above the neckline of the reverse H&S I mentioned seeing on the five-minute chart. The upside target should be about 544.00-544.50, an area of short-term S/R on the five-minute chart, also near the 544.37 level of the mid-channel Keltner resistance. That's presuming that it meets its upside target, which I'm not presuming. It is, however, nearing time for the OEX to retest that mid-channel resistance.

 
 
  Linda Piazza   5/6/2004,  2:06:09 PM
In the OEX's case, the rise of this afternoon's low is beginning to look a bit more like a bear flag than it did earlier. There was that first strong bounce and then a trailing cluster of small-bodied candles drifting somewhat upward, but now there's a back-and-forth pattern that's most typical of a bear flag. We'll have to see, because it's also possible to see a reverse H&S with a strongly descending neckline, with the head at today's low and the neckline now at about 542, if you look just right. Pick your bias, and you've got evidence to support it on that chart.

 
 
  Jim Brown   5/6/2004,  2:01:11 PM
Minutes of March FOMC meeting. Link

 
 
  Jim Brown   5/6/2004,  1:58:38 PM
The Friends cast was making $1 an episode each. Considering there were six of them each only got 1/6th of each 22 min episode. So for the roughly four minutes of dialog they earned roughly $250K per min. How are they going to top that?

 
 
  Linda Piazza   5/6/2004,  1:49:23 PM
What's trading at 29.50 times its average daily volume today? Coffin-maker Hillenbrand Industries (HB), and all that volume is to the downside, with the stock down 10.42 points as I type. HB reported earnings and obviously disappointed. The CEO gave a discouraging outlook, too, noting rising materials costs. This stock has far too low an average daily volume and has fallen far too much today for us to consider a play in this, but I mention it because it struck me as I was doing the OI Wrap last night how strongly some stocks were reacting to their earnings report. Of course, those reactions will be exaggerated in stocks with low average daily volume, such as MACE's strong upside reaction yesterday. These stocks aren't market-moving ones, but ever since last night, I've been wondering about the market implications when we have stocks zooming around like this. If they were all getting hit hard, we'd know what to do, but then we're seeing those big gainers, too. Still, there's something not quite stable feeling about all this, isn't there?

 
 
  Jim Brown   5/6/2004,  1:36:32 PM
If I paint a picture of a boy in blue with floating roses in the background I couldn't sell it for $104? Can you believe somebody paid $104 million for the Picasso? The previous owners bought it for $26,500 in 1956. Can Buffett beat those returns?

 
 
  Linda Piazza   5/6/2004,  1:35:46 PM
The DAX dropped 112.64 points or 2.80%, to 3909.46. That's below the 50-dma at 3979.23, a MA it's been hugging lately. It's possible to discern a possible continuation reverse H&S on the DAX's daily chart, with the DAX now threatening to fall through the right-shoulder level. I don't trust these continuation types of this formation, so I'm watching it with some skepticism but watching. The P&F chart says it won't confirm: there's a 3200 downside target on the P&F.

 
 
  Linda Piazza   5/6/2004,  1:23:26 PM
Although the rising regression channel on the BIX is forming at the point where you'd expect a bear flag to form, it's a little too broad a channel for my liking, as bear flags often form a tighter pattern in comparison to recent trading patterns. However, it's acting just as one might act. Here's a look: Link

 
 
  Jim Brown   5/6/2004,  1:12:46 PM
Declining volume nearly 6:1 over advancing and the A/D is better than 5:1 in favor of decliners.

 
 
  Jeff Bailey   5/6/2004,  1:02:53 PM
Taser Intl. (TASR) $30.64 -3.65% .... here's updated 60-minute interval chart of TASR. It is THIS OBSERVATION as to why I think OSIP needs to show a close ABOVE 38.2% for bullishness. Link

See 12:41:14

My current thought is that BEARS are now in control of TASR, but I'm not certain that BEARS are in control of OSIP at this point.

Remember how TASR seemed to be able to trade on its own regardless of what the broader MARKET was doing? It might be a stock like OSIP that is able to do the same.

 
 
  Linda Piazza   5/6/2004,  12:53:10 PM
The OEX has now breached the bottom Keltner support, giving a breakout signal. Bears should begin following the OEX lower with their stops, especially necessary since the OEX has just barely breached recent support. However, these signals can be valid, so this isn't always a sign that positions should be exited. Profits should be protected, however.

 
 
  Linda Piazza   5/6/2004,  12:50:00 PM
OI Put Play COF: Unfortunately (because it's turning down again today), this put play was stopped out yesterday on a move above $67.81. I'm normally not a part of the pick team for these plays, but am substituting for another member, and it's entirely my fault that the notation wasn't made that it had been stopped. In assuming extra duties, I just missed it, and apologize for the confusion that might have created. For those wondering why the stop had been lowered, here's an explanation I just offered an inquiring reader:

I have been covering this for only a couple of days, but do note that Sunday's writeup included a suggestion to buy on a failed rally under $68.00. That entry had cautioned to be sure to look for a rollover. While matters might have looked quite different during intraday trade, Tuesday's candle was a solid white one, although it did produce an upper shadow as it crossed and then pulled back under $68.00. As the members of the pick team studied the chart in preparation for Tuesday's newsletter, it appeared possible that COF was setting up a possible bear flag, with that possibility perhaps taking it as high as a 50% retracement of the last plunge. The 10-dma was at $67.75, with COF not able to trade above that 10-dma since 4/13. The decision was made to lower the stop to a few cents above that 10-dma, giving COF a little room to test it and roll down again. We didn't want readers to get caught in a bigger loss if COF was going to rise up toward $70.00. Of course, in retrospect, we wish we hadn't tightened that stop quite as tight as we did, although today's drop still keeps COF within the confines of a possible bear flag that could still rise up toward $70.00-70.80, a 50% retracement of the recent plunge.

 
 
  Jeff Bailey   5/6/2004,  12:41:14 PM
OSI Pharma (OSIP) $75.32 -1.28% ... here's intra-day chart of OSIP Link

Here's the chart of OSIP I showed yesterday, for perspective. Link

 
 
  Linda Piazza   5/6/2004,  12:38:16 PM
Careful. The OEX has breached that lont-term trendline as well as a shorter-term one off the March low. A break below Friday's and Monday's lows at 540.87 and 540.88 suggests a move down to the 200-dma, currently at 534.07. Bears should have a plan in place to protect any profits they've gained today in case of a bounce rather than a plunge.

 
 
  Jeff Bailey   5/6/2004,  12:30:09 PM
QCharts users .... Did you know that QCharts has developed a tool for DAILY and WEEKLY Pivot retracement? This allows for quick display of pivot analysis. Here's a chart of the QQQ intra-day, where I've turned on this option. I'd heard that it was available, but only find it this morning. Link

I'm going to have to set my preferences to get some different colors, but this option should be a great tool and time saver for traders.

 
 
  Jane Fox   5/6/2004,  12:29:11 PM
I wonder if Lea Fastow and Martha will end up in the same prison?

 
 
  Jane Fox   5/6/2004,  12:28:04 PM
Dateline WSJ For the wife of former Enron finance chief Andrew Fastow, months of legal wrangling have culminated in something familiar: Another guilty plea.

Lea Fastow was due in court Thursday to plead guilty to a misdemeanor charge of filing a false tax form. She also was to be sentenced for the crime, which carries a maximum of a year in prison.

She pleaded guilty to a felony tax crime in January, admitting to hiding shady income from the government by disguising it as gifts, in exchange for a sentence of five months in prison and five months of home confinement.

 
 
  Jeff Bailey   5/6/2004,  12:22:29 PM
Sell Program Premium SPX 1,109

 
 
  Jeff Bailey   5/6/2004,  12:13:46 PM
Per Jim's 12:03:02 ... here's a Link to an article that a fellow trader/investor sent me this morning in regards to a scenario for oil.

Question: Is Paul Erdman's disclosure of ownership of large multinationals, with exposure in Saudi Arabia a proper hedge? Perhaps not. Maybe it should be company's without exposure to Saudi Arabia.

 
 
  Jim Brown   5/6/2004,  12:03:02 PM
Hello Jim, a side note on oil/gas
I have been very interested in watching the strategy the Russians are using with oil, gas and electricity. They are making contracts left and right with ALL of Europe. I am talking about transmission lines and grids, pipelines etc.

They have small military budget--but they could cause a strong paralysis with the power they are building in the energy sector. They are exporting oil/gas to China, Japan--and oil to US.

Russian is the sleeping dog ('bear) in the equation. Thanks for your work, Ed

I completely agree! Also, China taking over all the manufacturing and increasing their high tech expansion with outsourcing from the US will eventually come back to bite us. Both are sleeping bears and it will be a painful awakening.

 
 
  Linda Piazza   5/6/2004,  11:56:43 AM
As I type, discussion on CNBC centers on commodities and materials. A trusted reader, T.G., sent me this interesting chart today: Link Components of the XLB include Air Products & Chemicals (APD), Alcoa (AA), Dow chemical (DOW), DuPont (DD), International Paper (IP), Newmont Mining (NEM), PPG Industries (PPG), Praxair Inc. (PX), Rohm & Haas Co (ROH), and Weyerhaeuser (WY). Thanks, T.G., for the instructive look at this chart.

 
 
  Jane Fox   5/6/2004,  11:56:41 AM
Moriningstar, a provider of independent investment research, has filed an IPO to sell up to $100 million in common stock.

 
 
  Jane Fox   5/6/2004,  11:53:48 AM
Dateline WSJ Federal Reserve Chairman Alan Greenspan said Thursday that the U.S. government's budget deficit is a threat to the nation's long-term stability.

Mr. Greenspan told a banking conference in Chicago that the federal budget deficit was a bigger worry to him than America's soaring trade deficit or the high level of household debt because those two problems can be corrected by market forces.

"The resolution of our current-account deficit and household debt burdens does not strike me as overly worrisome, but that is certainly not the case for our yawning fiscal deficit," Mr. Greenspan said in prepared remarks to a conference given by the Federal Reserve Bank of Chicago.

"Our fiscal prospects are, in my judgment, a significant obstacle to long-term stability because the budget deficit is not readily subject to correction by market forces that stabilize other imbalances," he said.

 
 
  Jim Brown   5/6/2004,  11:53:46 AM
Oil hit $39.97 this morning after more terrorist attacks in the mid east. OPEC said they may not raise production and there would not be an interim meeting. It appears likely that oil will break $40 soon just as the summer driving season begins. Every $1 in the price of oil over $25 a barrel adds a $7 billion undeclared tax on US consumers. This one event could seriously impact out economic recovery and take needed dollars out of circulation.

 
 
  Jim Brown   5/6/2004,  11:49:20 AM
WMT Reported sales that only reached the low end of expectations and the stock fell -1.00 on the news. Retailers complained that the early Easter pushed sales into March leaving April a retail slump. The drop in WMT took it to a new 3 month low at $55.00. Looks like Warren Buffett may get his chance to pick WMT shares after all.

 
 
  Linda Piazza   5/6/2004,  11:47:16 AM
You have to dial down to a 2-minute chart to see it, but the OEX is vorming a possible loosely formed reverse H&S on that two-minute chart. It's possible also to describe it as a triangle formation, with the OEX currently challenging the neckline/top triangle resistance. Whatever it is, the upside target would not be a big one, and would not be something you'd want to trade. Watching whether it confirms or reaches its upside target if it does helps us to measure whether the bears are still in control or whether some bulls are beginning to gain courage. Note: As I typed, the OEX turned back from that top resistance again. So far, bears remain in control, but they need to produce a lower low to stay there.

 
 
  Jim Brown   5/6/2004,  11:22:32 AM
Fed governor Broaddus is now speaking. This has been a very busy day for Fed speak.

 
 
  Linda Piazza   5/6/2004,  11:19:27 AM
The OEX is skating on the edge of a fall below that precipice, the long-term descending trendline that's been supporting it since last August.

 
 
  Jim Brown   5/6/2004,  10:59:24 AM
Remarks by Fed Governor Olson
Panel discussion: The Competitive Edge of Community Banks Link

 
 
  Jim Brown   5/6/2004,  10:54:52 AM
The A/D line has fallen to -4108. This is very negative and suggest strong fear that the jobs number tomorrow could be a blowout that prompts a Fed move on Monday.

 
 
  Jim Brown   5/6/2004,  10:52:30 AM
The Dow has retraced 61% of the rebound from the April lows. This 10221 level was support several times over the last couple weeks and a break here could easily see 10000. Link

 
 
  Linda Piazza   5/6/2004,  10:51:56 AM
MACD wins again. In my 10:42 post, I commented that on the OEX five-minute chart (might have been different for other indices), MACD was not showing the same bullish divergence as were CCI and RSI, always quicker to react. I interpreted that to mean that a bounce attempt might be mounted, but that it should be treated with some caution. The bounce didn't get far, but perhaps MACD's victory won't last long. That CCI and RSI divergence continue.

If you'd asked me at the beginning of 2003 to name my favorite oscillators, I'd have told you that stochastics and RSI were my favorites, with patterns on the RSI the hands-down winner. This last year taught me to hone in on MACD. That may change again as markets change, but that's where I am right now.

 
 
  Linda Piazza   5/6/2004,  10:42:49 AM
As Jonathan mentioned with respect to other securities, the OEX is sitting on that long-term ascending trendline that's been defining bottom support for its triangle. It's trying a bounce from that trendline now, a bounce that was suggested by the CCI divergences Jane mentioned with respect to other securities and also by RSI bullish divergence. There's no divergence on the MACD, however, on the five-minute chart. It's headed down right along with the prices. I'm concluding that RSI and CCI, quicker to react but also more fickle, are suggesting a bounce attempt but MACD suggests that we greet it with some caution. Let's watch and see how it plays out.

 
 
  Linda Piazza   5/6/2004,  10:35:04 AM
OI Play COF: Weakness today is helping the OI put play on COF, with COF moving down inside its likely bear flag. Play participants should be watchful of a break below the 5/03 low of $64.50, since such a break might send it quickly down to test its 200-dma. Although the official exit was listed at $62.75, the 200-dma has now risen to $63.04. Unless there's a quick plunge through that 200-dma, it might provide support for a bounce attempt. Conservative play participants might decide now whether they'd prefer to set a profit target just above that 200-dma.

 
 
  Linda Piazza   5/6/2004,  10:25:02 AM
The OEX has of course made it above a 50% retracement of that first five-minute range, but it's done it in a pattern that looks like a bear-flag pattern. As I typed, that began breaking down.

 
 
  Keene Little   5/6/2004,  10:19:37 AM
XAU, and NEM, both gapped down this morning and appear to be getting a bounce off their 62% retracements of the rally off the May 3rd low. In addition to that support level, there is a trend line as seen on this NEM 30-min chart that looks to have provided support. I'm counting this pullback as wave-2 and a 62% retracement is very typical for 2nd waves. If the pullback is over we should now see price start the next leg higher in wave-3, usually the strongest wave. It will be important for the gold stocks to close this morning's gap otherwise it will leave a small island reversal (gap up May 4th, gap down today leaves an island at the top), though these reversal signals are more powerful at the end of a run. I see as I'm typing this up that price is attempting to close the gap now. Link

 
 
  Linda Piazza   5/6/2004,  10:09:49 AM
The SOX is not adding to yesterday's gains, sitting near the flat-line level today. It also has not yet fallen out of the possible "b" distribution pattern or bear-flag pattern it's forming on its daily chart, however. In fact, it's trying to bounce up from the bottom support of a descending regression channel on its daily chart, perhaps to rise to retest its 200-dma. It's possible to look at those different factors and come away with different impressons of the SOX action, and today isn't offering definitive proof of either interpretation. Those supporting either viewpoint should tread cautiously. Bulls entering on a break above that consolidation pattern should be aware of the possibility that the formation could be settling into a bear flag that might break to the downside somewhere below or at the 200-dma. Bears entering on a break below this week's rising trendline should be aware that regression channel support lies just below and the SOX could bounce again and head up into that channel. Just know where your stops should be in order to prove your thesis wrong and hold to those stops. It's dangerous to get married to any bias right now.

 
 
  Jim Brown   5/6/2004,  10:09:02 AM
Two IPOs today:

Greenhill & Co. (GHL-NYSE): Investment banker specializing in M&A, restructurings, and private equity management. The offering price is $17.50 for 5 million shares, slightly above the initial range. Goldman Sachs is the lead manager and Lehman is the co-manager. This just had a somewhat cautious article in Barron's over the weekend. The company had $127M in Revenues in the last year and had net imcome of approximately $26 million.

Origen Financial Inc. (ORGN-NASDAQ): Mortgage REIT that originates, services (most of operations is servicing), and securitizes home loans mainly in the manufactured home sector. The offering is 8 million shares priced at $8.00 with Lehman as the apparent underwriter. It looks like there is already a standby filing for selling shareholders, although that can change at any moment.

 
 
  Jim Brown   5/6/2004,  10:06:28 AM
Speech by Chairman Alan Greenspan
Globalization and innovation Link

 
 
  Linda Piazza   5/6/2004,  10:00:45 AM
The BIX has retraced all of yesterday's gains as it heads back down again inside the ascending regression channel on its daily chart. That channel had formed under the neckline of a H&S on its daily chart, and so was presumed to be a bear-flag rise into resistance. However, that's not proven until and unless the BIX breaks through that ascending regression channel and then confirms that break by a break below its 200-dma, now at 331.20. For now, however, the action looks bearish today although that bearish action has not yet produced a bearish kiss on the stochastics or erased the bullish cross on the MACD.

 
 
  OI Technical Staff   5/6/2004,  9:58:24 AM
Monitor Problems
It appears we are experiencing some left over problems relating to our outage from yesterday. We are seeing some instability in the platform and the techs are working to resolve it. If we drop offline again it should only be temporary. Please bear with us.

 
 
  Jonathan Levinson   5/6/2004,  9:58:12 AM
4B in expiring overnight repos has been replaced by 3.5B for a net drain of 500M in short term Fed money.

 
 
  Linda Piazza   5/6/2004,  9:56:45 AM
The OEX hasn't yet been able to make it back above a 50% retracement of that first five-minute tall red candle. Since then, the five-minute candles have been congregating in the lower half of that first five-minute range. That's not a sign of strength as we watch this first retracement of the day.

 
 
  Linda Piazza   5/6/2004,  9:36:01 AM
During the first five minutes of trading today, the OEX dropped from 547.19 to 544.44. Bottom Keltner support is now near 542.88.

 
 
  Linda Piazza   5/6/2004,  9:34:13 AM
As the OEX opens, it heads down toward the bottom support of its large triangle on its daily chart. A drop below Friday's and Monday's low, 540.87 and 540.88, would confirm the breakdown out of that triangle and suggest a retest of the 200-dma. I know I caution to be careful all the time, but anyone entering on a supposed breakdown out of that triangle should be prepared to be whipsawed a time or two, as a reflexive bounce might result. Don't hang on too long if such a reflexive bounce should occur, however, thinking that's what it is and the OEX is sure to turn down again, because we could see a false breakout or two of this triangle, too.

It goes without saying that the same cautions should be attached to any bullish play entered on the hopes of a bounce from that trendline.

 
 
  Jim Brown   5/6/2004,  9:24:59 AM
Greenspan making comments that he expects Productivity growth to slow.

 
 
  Jim Brown   5/6/2004,  9:12:54 AM
Speech by Fed Governor Susan Schmidt Bies
Financial Innovation and Effective Risk Management Link

 
 
  Jim Brown   5/6/2004,  9:01:21 AM
Wilshire 5000 Symbol Change
According to Qcharts support the symbol for the Wilshire 5000 changed from $TMW.X or index:TMW.X to $DWC or index:DWC. Unfortunately they have yet to transfer the history from TMW to DWC.

 
 
  Jonathan Levinson   5/6/2004,  8:32:56 AM
Productivity- prelim 3.5% vs Consensus 3.5%

 
 
  Jonathan Levinson   5/6/2004,  8:32:40 AM
Bank of England raises interest rates.

 
 
  Jonathan Levinson   5/6/2004,  8:32:24 AM
Initial claims downside surprise at 315K.

 
 
  Linda Piazza   5/6/2004,  8:28:49 AM
If the MM had to be out any day, yesterday was the right day. As I mentioned in the OI Wrap last night, as soon as the ISM number was released, indices set up triangles on the five-minute charts. They broke through those triangles to the downside in domino fashion about midday, fell slightly, and then climbed to retest the broken trendlines. The SPX and OEX reached their trendlines first and were actually the only one to cross them. The Russell 2000 failed that retest sooner than the others and fell away more steeply. While there were other ways to measure yesterday's action, it certainly continued the non-directional trading pattern we've been seeing. It also certainly did nothing to inspire great bullish hopes, although we should try to avoid strong conclusions ahead of a break one direction or the other out of those consolidation patterns. On the OEX, the day produced a doji entirely within the previous day's range, although not within the body of the previous day's candle.

Trading is likely to become even choppier as the indices move into the apexes of their various wide triangles. On the OEX, a fall below Monday's low might signal a test of the 200-dma, now at 533.999. A break above Tuesday's high might see a test of 553.50, then 556.75-558 if that level is breached, and then 569 if that one is.

 
 
  Linda Piazza   5/6/2004,  8:25:05 AM
Here is the post I put together at 7:00 EST this morning. Since then, the ECB, as expected, has left rates unchanged, while the Bank of England, also as expected, has raised rates a quarter point. Since then, the FTSE 100, CAC 40, and DAX have deepened their losses, now down 0.81%, 1.49%, and 1.99%, respective.

Good morning. Although the Chinese markets remain closed throughout the rest of this week, the Japanese markets opened again for Thursday's trading. After the three-day holiday, the Nikkei opened near the flat-line level and then fell through the rest of the day. Closing less than twenty points off its low of the day, the Nikkei closed down 190.45 points or 1.62%, at 11,571.34. Auto and domestic-related issues led the declines, while banks and a few tech stocks gained in early trading, attempting to stem the declines. In Mitsubishi's case, the arrest of seven company executives due to a fatal accident involving a car manufactured by unlisted unit Mitsubishi Fuso exacerbated the weakness seen in the auto sector, sending the stock down 5.1%. Banks couldn't hold onto their gains, and some got hit hard when the sector turned lower. Exporters declined in general, but Sony also suffered due to the CFO's suggestion in an interview that the company could report an operating loss in the current quarter.

Other Asian bourses turned in mixed performances. Taiwan saw some stocks recover from Wednesday's losses, including Taiwan Semiconductor and United Microelectronics, adding 0.9% and 0.07%, respectively. Those gains helped the Taiwan Weighted to climb 0.95%. In South Korea, the central bank left rates unchanged, but the Kospi still turned lower by 3.44% as companies such as Samsung Electronics and Hynix Semiconductor plunged, by 4.9% and 7.2%, respectively. Singapore's Straits Times lost 0.68%. Hong Kong's Hang Seng gained 0.50%.

Most European bourses turn lower this morning as the ECB and Bank of England meet to decide rates. The ECB is not expected to change rates, while some speculate that the Bank of England will again hike rates. Rising oil prices pressured the jittery markets. Oil majors rose in early trading, including Royal Dutch, BP, Total, and Shell. Several banks were in the news with French bank BNP Paribas falling in early trading after reporting Q1 results, beating net income expectations. The provisions for loan losses declined 27.7%, helping to achieve that better-than-expected result, however. In its upgrade of Swiss bank Credit Suisse today, Deutsche Bank mentioned that most banks were using those lower loan loss provisions to increase profitability, along with trading revenue growth, but that Deutsche Bank wanted to see investment growth such as that Credit Suisse was displaying, too. That sentiment perhaps explained in part why BNP Paribas fell despite that better-than-expected result. Credit Suisse was gaining in early trading as a result of its upgrade. Yesterday, Germany's Schroeder urged banks to consolidate, and today Deutsche Bank reportedly expressed its interest in bidding for the banking unit of Deutsche Post. Investors weren't cheered and sent Deutsche Bank lower. Other stocks on the move included DaimlerChrysler, declining in early trading after its CEO announced in two newspaper interviews that he would stay with the company through 2008.

As of this writing, the FTSE 100 has declined 25 points or 0.55%, to trade at 4544.50. The CAC 40 has fallen 46.02 points or 1.23%, to 3683.36. The DAX has fallen 53.32 points or 1.33%, to 3968.78.

 
 
  Jonathan Levinson   5/6/2004,  8:11:22 AM
Awaiting the 8:30 release of preliminary Productivity for Q1, est. 3.5%, and initial claims, est. 335K.

 
 
  OI Technical Staff   5/5/2004,  1:18:29 AM
Monitor Outage
We experienced a catastrophic hardware failure early Wednesday morning. The monitor was knocked completely off line for most of the day until the hardware could be replaced.

An email was sent to all monitor subscribers at 8:AM ET informing them of the problem. If you did not receive the email please check with customer service to make sure we have your correct email address on file.

This was the worst outage the monitor has experienced since inception over four years ago. We sincerely hope it is another four years before it happens again.

 
 
  OI Technical Staff   5/5/2004,  1:17:32 AM
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